[Federal Register Volume 62, Number 128 (Thursday, July 3, 1997)]
[Rules and Regulations]
[Pages 35970-35972]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17413]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AI83


Minimum Income Annuity

AGENCY: Department of Veterans Affairs.

ACTION: Interim rule with request for comments.

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SUMMARY: The Department of Veterans Affairs (VA) is amending its 
adjudication regulations to provide for payment of the minimum income 
annuity, authorized by Pub. L. 92-425 as amended, to certain surviving 
spouses. This amendment is necessary to reflect statutory revisions 
contained in the National Defense Authorization Act for Fiscal Year 
1997 that transfers the responsibility for paying this benefit from the 
Department of Defense (DoD) to VA.

DATES: Effective date: July 1, 1997.
    Comment Date: Comments must be received by VA on or before 
September 2, 1997.

ADDRESSES: Mail or hand deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, 810 
Vermont Ave., NW, Room 1154, Washington, DC 20420. Comments should 
indicate that they are submitted in response to ``RIN 2900-AI83.'' All 
written comments received will be available for public inspection at 
the above address in the Office of Regulations Management, Room 1158, 
between the hours of 8 a.m. and 4 p.m., Monday through Friday (except 
holidays).

FOR FURTHER INFORMATION CONTACT: John Bisset, Jr., Consultant, 
Regulations Staff, Compensation and Pension Service, Veterans Benefits 
Administration, 810 Vermont Avenue, NW, Washington, DC 20420, telephone 
(202) 273-7230.

SUPPLEMENTARY INFORMATION: Pub. L. 92-425 section 4, 86 Stat. 706, 712 
(1972) (10 U.S.C. 1448 note), provides for payment of a guaranteed 
minimum annual income (the so-called minimum-income-widow annuity, 
hereinafter referred to as the minimum income annuity) to certain 
surviving spouses of persons entitled to military retired or retainer 
pay at the time of their death. To be eligible, a person must: (1) Be 
the surviving spouse of a military retiree who died prior to March 24, 
1974; (2) be eligible for VA nonservice-connected death pension; (3) 
have annual income that is less than the maximum annual rate of pension 
under 38 U.S.C. 1541(b); and (4) be ineligible to receive an annuity 
under the Survivor Benefit Plan (10 U.S.C. 1447-1455).
    Section 638 of the National Defense Authorization Act for Fiscal 
Year 1997, Pub. L. 104-201, sec. 638, 110 Stat. 2422, 2581, transfers 
responsibility for the payment of the minimum income annuity to the 
Secretary of Veterans Affairs from DoD. However, DoD remains 
responsible for funding this benefit and determining basic eligibility. 
This transfer is effective on July 1, 1997, and applies with respect to 
payments of benefits for any month after June 1997.
    Pub. L. 104-201 also provides that the minimum income annuity shall 
not affect the pension eligibility of the surviving spouse even though, 
as a result of including the amount of the annuity as pension income, 
no amount of pension is due. We interpret this provision to mean that 
an individual is still to be considered ``eligible for pension'' from 
VA for purposes of determining basic eligibility for the minimum income 
annuity even if that

[[Page 35971]]

individual's income is excessive for VA pension purposes when the 
minimum income annuity is added to any other countable income.
    We are adding a new section, 3.811, to title 38, Code of Federal 
Regulations, to reflect these statutory provisions.
    Under DoD procedures (DoD Financial Management Regulation, Chapter 
10, 91001), the minimum income annuity is payable to surviving spouses 
receiving Spanish-American War pension without regard to income. Since 
the pension paid to survivors of Spanish-American War veterans under 38 
U.S.C. 1536 is not an income-based program, we will continue to pay the 
minimum income annuity to those beneficiaries in the same manner as 
DoD.
    Pub. L. 92-425, as amended, specifies that annual income for 
minimum income annuity purposes is to be determined in the same manner 
as VA determines income for pension purposes. Consistent with that 
requirement, we will determine a beneficiary's annual income for the 
purpose of the minimum income annuity under the provisions of 
Secs. 3.271 and 3.272 for beneficiaries receiving improved pension, or 
under Secs. 3.260 through 3.262 for beneficiaries receiving old law or 
section 306 pensions, except that the amount of the minimum income 
annuity will be excluded from the calculation.
    38 U.S.C. 5123 requires VA to round down the amounts of section 306 
pension and pension payable under 38 U.S.C. 1521, 1541 and 1542 to the 
nearest dollar. There is no similar requirement in title 10, United 
States Code, for computing the minimum income annuity. Therefore, we 
will not round the monthly minimum income benefit to the nearest whole 
dollar.
    Pub. L. 92-425, as amended, provides that the amount of the minimum 
income annuity is calculated by subtracting the income of the surviving 
spouse, exclusive of VA pension, but including benefits payable under 
10 U.S.C. 1431-1436 (Retired Servicemen's Family Protection Plan 
(RSFPP)) from the maximum annual pension rate under 38 U.S.C. 1541(b). 
Since RSFPP benefits are countable as income for improved pension 
purposes, for beneficiaries receiving improved pension, VA will 
determine the minimum income annuity payment by subtracting the annual 
income for pension purposes from the maximum annual pension rate under 
38 U.S.C. 1541(b).
    Since RSFPP benefits are not countable income for old law and 
section 306 pensions (See 38 CFR 3.261(a)(14)), for beneficiaries 
receiving old law and section 306 pensions, VA will determine the 
minimum income annuity payment by reducing the maximum annual pension 
rate under 38 U.S.C. 1541(b) by the amount of benefits payable under 
the RSFPP, if any, that the beneficiary receives from DoD and the 
annual income for pension purposes.
    VA will recompute the monthly minimum income annuity payment 
whenever there is a change to the maximum annual rate of pension in 
effect under 38 U.S.C. 1541(b) and whenever there is a change in the 
beneficiary's income.
    Since a beneficiary must be eligible for VA pension in order to be 
entitled to the minimum income annuity, if the beneficiary's 
eligibility to nonservice-connected death pension terminates for any 
reason, VA will terminate the minimum income annuity effective the same 
date.
    We are making this document effective on July 1, 1997. The document 
contains restatements of statute and interpretive rules which under the 
provisions of 5 U.S.C. 553 are exempt from prior notice and public 
comment and delayed effective date provisions.
    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601-612. Only VA beneficiaries could be directly affected. 
Therefore, pursuant to 5 U.S.C. 605(b), this amendment is exempt from 
the initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

(The Catalog of Federal Domestic Assistance program number is 
64.105.)

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Health care, 
Individuals with disabilities, Pensions, Veterans.

    Approved: June 4, 1997.
Jesse Brown,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, 38 CFR part 3 is amended 
as follows:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

    1. The authority citation for part 3, subpart A, continues to read 
as follows:

    Authority: 38 U.S.C. 501(a), unless otherwise noted.

    2. Section 3.811 is added to read as follows:


Sec. 3.811  Minimum income annuity.

    (a) Eligibility. The minimum income annuity authorized by Pub. L. 
92-425, as amended, is payable to a person:
    (1) Who the Department of Defense has determined meets the 
eligibility criteria of section 4(a) of Pub. L. 92-425, as amended, 
other than section 4(a)(1) and (2); and
    (2) Who is eligible for pension under subchapter III of chapter 15 
of title 38, United States Code, or section 306 of the Veterans' and 
Survivors' Pension Improvement Act of 1978; and
    (3) Whose annual income, as determined in establishing pension 
eligibility, is less than the maximum annual rate of pension in effect 
under 38 U.S.C. 1541(b).
    (b) Computation of the minimum income annuity payment.--(1) Annual 
income. VA will determine a beneficiary's annual income for minimum 
income annuity purposes under the provisions of Secs. 3.271 and 3.272 
of this part for beneficiaries receiving improved pension, or under 
Secs. 3.260 through 3.262 of this part for beneficiaries receiving old 
law or section 306 pensions, except that the amount of the minimum 
income annuity will be excluded from the calculation.
    (2) VA will determine the minimum income annuity payment for 
beneficiaries entitled to improved pension by subtracting the annual 
income for minimum income annuity purposes from the maximum annual 
pension rate under 38 U.S.C. 1541(b).
    (3) VA will determine the minimum income annuity payment for 
beneficiaries receiving old law and section 306 pensions by reducing 
the maximum annual pension rate under 38 U.S.C. 1541(b) by the amount 
of the Retired Servicemen's Family Protection Plan benefit, if any, 
that the beneficiary receives and subtracting from that amount the 
annual income for minimum income annuity purposes.
    (4) VA will recompute the monthly minimum income annuity payment 
whenever there is a change to the maximum annual rate of pension in 
effect under 38 U.S.C. 1541(b) and whenever there is a change in the 
beneficiary's income.
    (c) An individual otherwise eligible for pension under subchapter 
III of chapter 15 of title 38, United States Code, or section 306 of 
the Veterans' and Survivors' Pension Improvement Act of 1978, shall be 
considered eligible for pension for purposes of determining eligibility 
for the minimum income

[[Page 35972]]

annuity even though as a result of adding the amount of the minimum 
income annuity authorized under Pub. L. 92-425 as amended to any other 
countable income, no amount of pension is due.
    (d) Termination. Other than as provided in paragraph (c) of this 
section, if a beneficiary receiving the minimum income annuity becomes 
ineligible for pension, VA will terminate the minimum income annuity 
effective the same date.

    (Authority: Pub. L. 92-425 as amended (10 U.S.C. 1448 note); 
Sec. 638, Pub. L. 104-201, 110 Stat. 2581)

[FR Doc. 97-17413 Filed 7-2-97; 8:45 am]
BILLING CODE 8320-01-P